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As local currencies weaken, dollar debts increase in value and become increasingly difficult to service.
The basic reason to expect higher rates is that investors usually demand compensation as a borrower's debts increase.
Inside, economics editor Dan O'Brien says the chance of defaulting on debts increase in the absence of socialising some of the losses.
In inflation-adjusted terms borrowers would see the value of their debts increase – another factor that could make them less likely to spend.
Portuguese and Greek banks, along with their Irish counterparts, have become fully dependent on short-term financing from the European Central Bank for their survival as their economies deteriorate and doubts about their ability to repay their debts increase.
Foreign ministers at the meeting of the Group of 77 formed a proposal to ask rich countries to forgive debts, increase aid and trade, share new technologies and shift more decision- making to the United Nations and away from institutions like the World Bank and the International Monetary Fund.
Similar(53)
But their debts increased all the same.
Such debts increased the difficulty of finding funds to finance development.
The sovereign debts increased in all the emerging market countries during the two crises, but especially during the European Debt Crisis.
University courses were to be largely deregulated, and the interest rates on HECS debts increased.
Allan did send additional money and clothes, but Poe's debts increased.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com